I'm exited about this post as I get to talk about a few of my favorite things, cowboys, cars, steaks, and …game theory.
"Ford filed a formal complaint in the US District Court for the Northern District of Georgia on October 31. Vintage Broncos, the subject of the complaint, is a company that takes modern sixth-generation Broncos and makes them look like the classics. Ford believes the business is doing this illegally." - Caleb Jacobs, writing at "The Drive"
One image, from the top of Caleb's piece, will illustrate what the fuss is about:
Caleb and his colleague Beverly Braga have written about these cars before. In a May piece, Braga mentions that the modified vehicles start at around $169,000 - - vehicles priced from $219,500 to $349,500 were in inventory.
"Vintage Broncos has a following among the rich and famous. It’s sold vehicles to LeBron James, Mark Wahlberg, and Jennifer Lopez, to name a few. … Before delivery, Vintage Broncos does a thorough inspection, including a 400-mile break-in. After that, you can have routine maintenance done at a local Ford dealership, but warranty claims have to go through Vintage Broncos. And with the proper upgrades, of course, you can daily your new handcrafted new-old Bronco. I would." - Beverly Braga, writing at "The Drive"
Scanning the internet, reaction to the news of the suit was along the lines of:
"F$CK FORD"
"Ford should give people what they want."
disparaging lawyer jokes
and, upon seeing the cars in question, a giant heap of
You see, people really love the Ford Bronco, particularly the old, first-generation ones, built between 1966-1977. There are fan communities for them, both online and in-real-life. Beautifully-restored Broncos can fetch a half million dollars.
HOW AN ORGANIZATION DEALS WITH "COMPLEMENTS" IS A CRITICAL, STRATEGIC DECISION
My favorite class in graduate school was entitled "Competition, Markets, and Power". I'll never forget spending most of a day, sitting at my desk struggling with one, assigned, word problem: "A Bankruptcy Problem from the Talmud", dividing an estate among the creditors. It was, literally, a few sentences long: Agree or disagree, why? The internet was in its infancy - - way before ChapGPT! - - so we couldn't cheat and just look it up. My professor in the HBS class, Adam Brandenburger, went on that year to write the bestselling "Co-opetition: A Revolution Mindset that Combines Competition and Cooperation".
Brandenburger and co-author Barry Nalebuff used game theory to explore when "competitors" should work together rather than butting heads. They demonstrate that there is an interplay between cooperation and competition, hence the title, "Co-opetiton". They introduce a value net.
Four of the boxes you know well, they're pretty orthodox. The insight from Co-opetition is the existence of a new box on the right, "Complementors".
“A player is your complementor if customers value your product more when they have the other player’s product than when they have your product alone.” - Co-opetition
To give you a very simple example, think of mustard and relish at a hot dog stand. Can you see that the entire "condiment" category is a complement in the food business? Thus, condiment makers have a strong interest that hot dogs are well-loved and sell well. Likewise, hot dog makers should do everything they can to encourage a dynamic, creative, condiment business.
In the Bronco case above, Ford is, in fact, interacting with a "complementor", Vintage Modern. I hope, for Ford's sake, that executive leadership sees this for what it is.
COMPLEMENTORS MUST BE TREATED AS IMPORTANT PARTNERS, NOT RIVALS, THREATS, OR ENEMIES
Ford's cause of action in the suit against Vintage Broncos is Trademark Infringement (15 U.S.C. § 1114).
"Vintage Modern, Inc. doing business as Vintage formerly known as Vintage Broncos LLC formerly known as Vintage Broncos, Inc., Vintage Broncos, Inc., Vintage Modern LLC, Vintage Broncos LLC, Chau Nguyen and Vintage Modern Subsidiary, LLC" - named Defendant, Ford Motor Company case filing
At the time of writing this piece, the company url is vintagebroncos.co, but one can note that they now refer to themselves as "Vintage Modern" and have added disclaimers to show respect for Ford's trademarks. If Ford is smart, they will find this adequate and leave well enough alone. It is critical that they tread carefully.
Is Ford better off with the existence of firms like Vintage Broncos? Absolutely. As a thought exercise, ask the question: If Ford had a magic wand and could "disappear" every, last, vintage Bronco on the road would this stimulate demand for the new Bronco? I can't imagine a scenario in which it would.
It is the very existence of the vintage Broncos - - and their resilient "cool factor" that drove the launch of the new Bronco product. As written in the Robb Report, "Ford’s design chief, Moray Callum, lent his 1976 Bronco to the design team to digitally scan for reference when developing the new models." Every vintage Bronco on the road is a rolling advertisement for the new Bronco.
COMPLEMENTORS CAN ALSO ACT THROUGH TIME, IN THE FORM OF FAN LOYALTY, INSTALLED USER BASES, AND BACKWARDS COMPATIBILITY
“People would take pictures out of their wallets and tell stories of their brother’s Bronco, or the one that their dad had as a kid; they got passed on through families.” - Paul Wraith, chief designer for Bronco and Bronco Sport
Think of it this way, a grandfather's love of his 1966 Bronco makes it more likely that his granddaughter will buy the 2024 model. The memory, the shared history, of the 1966 Bronco past product is a complement to the 2024 present product.
In class with Adam, I argued in my final paper that installed user bases work the same way. At the time, there was a standards war taking place in optical data storage: If two rivals were introducing a new data storage format and one made their new player "backward compatible" with their previous offering, they win, even if their new product is inferior to the competitor's offering!
SMART LEADERS ACTIVELY CULTIVATE STRONG COMPLEMENTS AND RELATIONS WITH THEM
Sticking with the example of Ford, how might they do that? Some things easily come to mind:
Adopt a "See what a Bronco can be!" attitude and behavior with those who modify their new Broncos
Give some top "modders" some vehicles to work with and showcase their work
Include modder input into the actual design process, "What would make this vehicle more easy to mod?"
Make a "staff swap" with some leading firms in the mod community, "What can we learn from each other?"
Seed the vintage fan community with new Broncos
Ford needs to get this fixed with Bronco. And Ford needs to fix it now.
"Ford Motor Co. is dialing back Bronco production amid rising inventories and a slowdown in sales, reassigning 400 workers who build the SUV from the Michigan Assembly Plant in Wayne to nearby locations." - Crain’s Detroit Business, November 20, 2024
Companies like Vintage Broncos help Ford sell Broncos! Grab the amplifier knobs, turn the "Legal" volume down, turn the "Marketing" and "Product Development" volumes up.
Aftermarket parts and accessories is big business, and this business is all "Supplier" and/or "Complementor" to companies like Ford. According to Fortune Business Insights, the market was $430 billion in 2024 and will grow to $568 billion by 2032, a cumulative annual growth rate of 3.5%. The aftermarket caters to the needs and preferences of vehicle owners, offering choices beyond what is available through the original equipment manufacturers: Replacement parts, performance-enhancing components, accessories, and maintenance and repair services.
Before I move on to an ideation exercise, I want to remind you that I wrote about Tesla's new Cybercab. Now that you have read to here, I'll ask you to go re-examine that piece when you have time. I'm making a "complement" argument there as well.
"Elon needs to shepherd his pool of cab-hailing-service drivers - - those who shepherd the first customers into the self-driving world, into becoming the shepherds of the eventual, almost-fully-automous transportation service(s)." - Semper Doctrina
The drivers are Elon's Cybercab complementors!
COMPLEMENTORS ARE ALL AROUND YOU - - NOTICING WHERE ONE IS OBVIOUSLY MISSING IS A FOUNTAIN OF ENTREPRENEURIAL OPPORTUNITY!
Let me share a couple of fun examples of complementor, not competitor.
- A steakhouse I like to visit is reservation only, all seats, including the twenty-plus at the horseshoe-shaped bar. I've heard that one used to be able to walk in, take a seat at the bar, order drinks, and - - if one was so inclined - - food, as well. At some point they decided to make it reservation only, so each bar seat is now treated as a "dining table", for one. As you might imagine, this means that the establishment no longer attracts, or serves, people who want drinks and "maybe more". They turn them away! Does this sound like a place just begging for a complement? You bet. An enterprising person could do well with a bar nearby, picking up all of the pre-dinner drinks business AND the after dinner cocktails business. Even better? Do this with some light snacks and deserts!
- I was driving down the highway near a resort community. There has been a miniature golf place for a couple of years, but I noticed something new: Someone has recently opened a disc golf, or frisbee golf, place nearby. Are they competitors? Or, are they complements to each other? I'll argue complements. The two owners, if they are wise, will behave accordingly! Not convinced? In the East Village, Manhattan, where I used to live, there was a street famous for wedding dresses. Young women, striking out as designers, co-located on the street: While the naive might have thought this madness, as your "competitor" was, literally, next door, it was, in fact genius. Young brides-to-be flocked there, as it was now a destination - - something that a single dress maker could never sew together herself! All dressmakers benefitted. Do you think a food truck would do well near the frisbee and golf place - - bet your life it would! [This is, btw, an excellent example of Michael Porter's Competitive Cluster.]
What I want you to think about, in the scenarios above, is how the players involved might react. Wise ones would see the complement for what it can be. They'd encourage it, they'd help facilitate it … they might even offer to fund it!
The point of these examples is to bring it down to Earth, to a smaller scale, for you to see that you can apply this thinking in your own life.
IF AN ORGANIZATION FAILS TO CULTIVATE COMPLEMENTORS, IT PLANTS THE SEEDS FOR COMPETITORS
By way of example:
- Steakhouse fails to cultivate the walk-in drinks bar. A competitive restaurant can do so and the combo will defeat the incumbent steak house. Alternatively, an entrepreneur "toughs it out" without the help of another restaurant: Mr. Tough can win the pre-dinner and after-dinner drinks. By doing so, he can, eventually, by incremental evolution, win the dinner business itself, again defeating the incumbent steakhouse.
- Mini-golf and frisbee fail to support or create the food complement. Mr. Food Truck toughs it out and builds the customer base, then a boccee ball and corn hole side gig. Again, by incremental evolution, he can dominate the recreation competitive cluster.
Popping it back up to Ford.
You know what comes to mind when I think of "vintage Bronco"? Vintage Jeep, vintage Land Rover, and vintage Toyota F40 Land Cruiser.
Oh, and did you know I built Toyota trucks?
Ford, are you nuts?! If Jeep, or Land Rover, or Toyota taps into that "mod" community, they will hobble you!
If you fail to create a rewarding environment for the complementor talent and energy, someone else will, and they will win.
This is across the chessboard … more on the matter another time. How is NASA treating SpaceX? Complement? Competitor? Hmmmm.
As for me, my thoughts are on my favorite of the holidays, Thanksgiving. For me and my kin, this is an ancient tradition, pre-dating the Pilgrims by a millennium or two.
Happy Thanksgiving!